The World Bank has increased its growth forecast to 7% for the financial year 2024-25, up from the previous estimate of 6.6%. This adjustment underscores India’s robust economic performance, having been the fastest-growing major economy in FY24 with an impressive growth rate of 8.2%.
“India was the fastest growing economy in FY24 at 8.2%, and now it’s growing at a good pace,” commented Auguste Tano Kouame, the World Bank’s Country Director for India. He pointed out that while global growth remains sluggish compared to pre-pandemic levels, India’s economy continues to show strong momentum.
Looking ahead, the World Bank anticipates that India’s growth will remain positive in the medium term, with strong projections for FY26 and FY27. Kouame emphasized the importance of diversifying India’s export basket and leveraging global value chains to meet the ambitious target of $1 trillion in merchandise exports by 2030.
“India needs to diversify its export basket and leverage global value chains to reach $1 trillion in merchandise exports by 2030,” Kouame stressed.
The World Bank also forecasts a gradual reduction in India’s debt-to-GDP ratio, predicting it will decrease from 83.9% in FY24 to 82% by FY27. Additionally, the current account deficit is expected to remain between 1% and 1.6% of GDP up to FY27.
Kouame highlighted India’s proactive approach to free trade agreements as a significant factor contributing to its economic resilience. “India has had a proactive approach to free trade agreements,” he noted.
He further added, “India’s robust growth prospects along with declining inflation will help to reduce extreme poverty. India can boost its growth further by harnessing its global trade potential. In addition to IT, business services, and pharma where it excels, India can diversify its export basket with increased exports in textiles, apparel, footwear, electronics, and green technology.”
The World Bank’s revised forecast reflects a strong confidence in India’s economic trajectory, driven by strategic policy measures and a focus on expanding trade and exports.
